Highlights for Investors: Intel’s 1Q15 earnings
Key Takeaways from Intel's 1Q15 Earnings (Part 1 of 5)
1Q15 earnings review
On April 14, 2015, Intel (INTC) reported its fiscal 1Q15 results. The company posted revenue and non-GAAP (generally accepted accounting principles) EPS (earnings per share) of $12.8 billion and $0.41, respectively.
Intel’s revenue and EPS were in line with analysts’ expectations. They expected the company to post $12.9 billion and $0.41 in revenue and EPS, respectively, in 1Q15. As a result, Intel’s stock rose by 3% after the results were announced on April 14, 2015. On a YoY (year-over-year) basis, Intel’s revenue stayed flat, while its EPS rose by 8% in 1Q15.
For 1Q15, the operating income and net income stood at $2.6 billion and $2 billion, respectively. On a quarter-over-quarter basis, net income declined by 46%. On a YoY basis, it had a minor 3% improvement.
To gain diversified exposure to Intel, you can invest in the Market Vectors Semiconductor ETF (SMH) and the iShares US Technology ETF (IYW). SMH and IYW invest about 19% and 4.56% of their holdings in Intel, respectively.
Alteration in segment reporting structure
In 1Q15, Intel stated that the company consolidated the PC Client Group and the Mobile and Communications Group to form the CCG (Client Computing Group) as one operating segment. As we saw in the Intel’s 4Q14 earnings, all of the company’s operating segments, except the Mobile and Communications Group, registered a YoY increase. The Mobile and Communications Group registered negative revenue due to the contra revenue aimed to push the Atom SoC (system-on-a-chip) for tablets—Bay Trail. BayTrail was developed for Microsoft (MSFT) and Google (GOOG) Android tablets.
Operating segment performance
The above chart shows the 1Q15 contributions of various operating segments towards Intel’s consolidated revenue. CCG continues to be a dominant operating segment. It contributes more than 55% to the total revenue. It’s followed by the Data Center Group.
The company’s CCG revenue stood at $7.4 billion—a decline of 8% on a YoY basis. The Data Center Group and IoT (Internet of Things) group revenue registered 19% and 11% YoY growth in 1Q15. In 1Q15, Software and Services’ revenue declined by 3% on a YoY basis.
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